Ramallah launches effort after Israel decides to withhold some NIS 500m in taxes over PA’s policy of paying stipends to security prisoners and families of dead terrorists

Adam Rasgon is the Palestinian affairs reporter at The Times of Israel

Mahmoud al-Aloul, member of the Central Committee of Fatah. (Issam Rimawi/Flash90)

The Ramallah-based Palestinian leadership has formed a committee tasked with creating a list of Israeli products to ban from entering Palestinian markets, Fatah’s vice chairman Mahmoud al-Aloul said on Thursday.

The move came in response to a decision by Israel’s security cabinet on Sunday to approve withholding NIS 500 million ($138 million) of tax revenues from the Palestinian Authority, Aloul told Voice of Palestine, the official PA radio station.

The security cabinet’s decision was a move to start implementing a new law that permits Israel to withhold tax money from Ramallah over payments the PA makes to security prisoners and the families of dead terrorists.

Aloul said the committee would seek to identify Israeli products which have local alternatives. The majority of products imported into the West Bank and the Gaza Strip come from Israel.

Samir Abdullah, a senior researcher at the Palestine Economic Policy Research Institute and a former PA minister, said local alternatives do not exist for most Israeli products imported into Palestinian markets.

“There are Palestinian substitutes for a number of Israeli food, dairy and clothing products,” he told The Times of Israel. “But Palestinian substitutes do not exist for most Israeli goods such as cement, building materials and other things.”

Aloul also said the PA had decided to send a letter of complaint to French President Emmanuel Macron over Israel’s decision to withhold the taxes. France sponsored negotiations between Israel and the Palestine Liberation Organization in the 1990s that led to the signing of the Paris Protocol, the annex of the Oslo Accords that defines the Jewish state and the PA’s economic ties.

Illustrative photo of Tnuva milk products (Nati Shohat/Flash90)

Aloul’s statements came a day after PA President Mahmoud Abbas said Palestinians would not accept any of the taxes Israel collects on behalf of the PA if it does not transfer the full amount to Ramallah.

“In the name of the Palestinian people and leadership, I announce our rejection of this unjust decision,” Abbas said in a meeting at the PA presidential headquarters on Wednesday. “I affirm… that either all of our funds come or we will not accept one penny.”

If the PA follows through, it could place itself in dire financial straits, as it would be turning down its largest source of income.

Citing Palestinian officials, Reuters reported on Sunday that Israel currently collects and transfers NIS 800 million ($222 million) in total taxes to the PA every month. Avi Dichter, the chair of the Knesset Defense Committee, has said Israel would spread out the withholding of the tax money over 12 months, meaning approximately 5 percent of each month’s NIS 800 million would be withheld.

A high-ranking Palestinian official insisted on Tuesday that the PA cannot stop its payments to security prisoners or the families of slain attackers, contending such a move would amount to “political suicide.”

“These payments are one of the most sensitive issues in Palestinian society,” the official, who spoke on condition of anonymity, told The Times of Israel. “If the PA were to get rid of them, it would be committing political suicide, especially considering the difficult political situation.”

A survey published in July 2017 by the Palestinian Center for Policy and Survey Research found that 91 percent of Palestinians were against halting the payments.

In addition to Abbas, several Palestinian officials have condemned Israel for moving to withhold the funds, arguing that the Israeli decision amounts to “piracy” of Palestinian funds.

Israeli officials have defended the move, arguing that the PA’s policy of paying security prisoners and slain terrorists incentivize violence and terrorism.

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